So many numbers are flying around that you might not have spotted today’s real news on RBS.
That is, the government has wiped the slate of an estimated £9-£11bn of tax liabilities owed by the giant bank.
In private Treasury officials suggest that the figure is closer to £4.5bn. But the larger figure has come from RBS’s own accounts.
So, not only is the government pumping £25bn of new capital into RBS (as first announced in February). It’s also buying £6bn of new shares in Lloyds Banking Group as part of LBG’s private fund-raising. And it’s creating a contingency rescue fund of £8bn for RBS (which may never be used). Plus the £10bn tax write-off.
That’s close to £50bn of taxpayers’ money.
The Treasury’s defence is a] a lot of the money was announced in the spring, b] RBS will take on more onerous terms such as taking a bigger “first hit” of any losses and c] would your rather let the bank collapse and prompt another financial meltdown?
Even so: These are big numbers. John McFall, chair of the Treasury select committee, told the Commons: “RBS is in a worse state than everyone thought last February.”
Jim Pickard
Kiran Stacey